Growing Demand for Space & AI Enthusiasm 6/5/26

 investors dig in for the market's next big test but futures are mixed right
 now as semis get hit again. I'm Morgan Brennan. This is your morning call.
 Good morning. Happy Friday. Let's get a check on US stock futures with the
 Dow coming off a fresh record high yesterday at the close. You can see right
 there on your screen. It's a mixed picture this morning pre-market. The Dow
 poised to open with gains the S&P and the Nasdaq lower this morning the
 Nasdaq poised as of right now for a firmly lower open. This keep in mind we are
 on pace for gains for both the S&P and Dow for the week. The Nasdaq right now
 fractionally lower investors preparing for the jobs report that's going to be
 out before the open just a little bit later this morning estimates that 80
 thousand jobs were added last month. It's down from 115 thousand for the
 prior month unemployment rate is expected to hold steady at 4.3%. But
 prediction markets are forecasting pretty much the same. Sixty percent of
 users on Kalshi are expecting 80 thousand or more. And if we take a look at the
 treasury market ahead of that key economic data you can see yields continue to
 be under a bit of pressure here across the curve US 10 year treasury yielding
 4.467%. Just a little bit lower than where we started the week and the Fed
 sensitive to your treasury yielding 4.037%. Well we're tracking energy as we
 monitor developments around Iran we've got more on that in just a moment.
 Meantime you could see oil is basically hovering around the flatline. We're on
 pace for gains for both WTI and Brent keep in mind way off the high as we've
 seen in recent weeks. WTI this morning is trading just below 93 bucks a barrel
 and Brent is trading around $95 a barrel. Well also Arbob just keep an eye on
 that too because that is actually poised for a lower week as well. Several
 stocks that were watching on the back of earnings Lululemon docusign
 rubric if you could take a look right there on your screen shares for all three
 are low are lower Lulule in particular down 12% right now we've got more on
 those moves and what's driving it coming up. Also we're watching Broadcom shares
 are following 12 they fell 12.5% yesterday following the earnings report that
 we got earlier this week shaving over $280 billion off of the market cap and
 as you can see this morning down again another 2% keep in mind this is one of
 those names that just had a parabolic move so far this year so perhaps some
 profit taking here for earnings that were either in line depending on the
 metric or better than expected but again huge valuation and a lot of
 expectations coming into that print or checking other names in the chip space as
 well and you can see right there on your screen red across the board here which
 is of course pressuring Nasek futures this morning. Let's see how Europe and
 Asia are closing out their trading weeks Ben Boulouse is in London Lisa Kim is in
 Singapore Ben let's kick it off with you. Yeah good morning to you European
 equity markets well somewhat mixed this morning with the AI rally fizzling out
 tech stocks that basket dragging on the stock 600 tech shares in Europe off by
 almost 2% at the moment while investors also keep an eye on those US
 non-farm payrolls. This is the picture across the main benchmarks as I say a
 mixed bag you've got the London and the Paris indices in positive territory the
 German and the Italian markets below the flat line. It's really interesting the
 tech sell-off really reflecting those moves on Broadcom shares that
 sharp slump of 12%. It's a bit like a pebble dropping off the coast of New
 York and the ripples being felt on our side of the ocean as well. One of the
 stock I want to focus on Airbus said it delivered 81 aircraft in May nearly a
 60% jump on the year putting its year-to-date deliveries at 262 deliveries to
 China resumed following what the French aviation described as an
 administrative delay with that Morgan. It's back to you have a great
 right. Ben Voulos. Thank you. You too. Be careful of those pebbles. Let's get
 over to the markets situation in Asia with Lisa Kim in Singapore for more
 high Lisa. Hey Morgan happy Friday. Most Asian stocks ended the trading week
 in the red with South Chris Benchmark indexed Cosby as the biggest loser.
 South Korean market operators had to halt trading for several minutes shortly
 after market open to stem a rapid plunge. That market has seen the most such
 hauls this year since the 20 away financial crisis which really goes on to
 show the volatility underneath the recent parabolic surge. So Korean stocks
 posted their steepest weekly decline since late March falling nearly 4%. Take a
 look at the Japanese yen. It is once again near 160 to the dollar close to
 erasing the gains from the recent government intervention that caused
 Japanese financial authorities around 75 billion US. The South Korean one
 has also depreciated a lot. It's depreciated the most since 20 away. It's
 sparking verbal intervention from the finance minister back to you. All
 right Lisa Kim. Thank you. We're going to keep an eye on that yen activity because
 it's been it's definitely been humming below the surface even as everybody
 focuses on the SpaceX IPO at least here in the US. Lisa have a good weekend.
 We're going to focus on it as well. SMP saying it does not plan to make any
 changes to its eligibility criteria which means the company along with other
 big IPOs that are potentially in the pipeline here won't be fast tracked into
 the index. It could still potentially join the SMP total market index. The
 Nikkei reporting that the MSCI has also declined to make an inclusion
 exception for SpaceX. Meanwhile Reuters is reporting that SpaceX is telling
 banks it's holding firm on the $135 per share price that it had set for
 next week's IPO. That's despite strong demand. SpaceX began meeting with
 potential investors yesterday as its IPO road show kicked off. CEO Elon Musk
 speaking to JP Morgan clients during the bank's event. This was hosted by
 CEO Jamie Diamond discussing his confidence in the company's revenue
 projections and the decision to go public now. We're mocking on a massive new
 growth phase and we need capital for that. Okay, number two. The revenue
 like I also feel pretty good about like the revenue projections. Before
 like the revenue was a little unstable but now I feel like the revenues
 like much more predictable. Well of course a lot of projects a foot at SpaceX
 and to that point launching rockets regularly which creates its own
 vote for all of the other businesses. Goldman Sachs reportedly saying that it
 expects revenue from SpaceX's AI division to surge to $322 billion by 2030.
 That's up from just three billion last year. Back to the markets though. Dow
 leading the major indexes for the week up 1%. The SMP 500 is fighting to end the
 week in the green up fractionally. If it does that would mark its 10th straight
 positive week. It's the longest win streak since 1985. If so, for more let's
 bring it Robert Teeter Chief Investment Strategist at SilverCrest Asset Management.
 Great to have you back here on set. Welcome. Welcome. Thanks. Great to be back.
 I mean we've got markets climbing a wall of worry here. How do you see this moving
 forward? What are the catalysts? Yeah, it's one of the most fascinating times we've
 had in a while with just absolutely unbelievable enthusiasm around the AI
 theme and the AI trade. A lot of IPOs coming to market and I think the way we map
 it out over the next few months is how do those expectations collide with reality?
 Where do we draw the demand from for investors to come in here and boost
 stocks higher? So one of the things we've noticed is yesterday was kind of a
 healthy rotation and so would expect to see maybe a little bit more of that. Some
 consolidation at time to digest these big gains. Digest the IPOs that are coming
 up. Maybe get some rotation into other areas. That would be the healthiest path forward.
 Rotation into other areas including new offerings to market like SpaceX?
 Well, they're definitely clearing up some space to pursue those. I didn't spend the space
 no pun intended but clearly investors need to gather some capital to invest in those.
 But yesterday you had some leadership from health care, financials,
 a small cap actually did okay yesterday. So we think perhaps it's a rotation of capital
 out of the biggest winners into the IPOs and into some of the areas that have been left behind
 this year. Yeah, meantime what is the bar market signaling? And I think it's and I ask that because
 it's been kind of fascinating. We haven't actually we've had moments here in the last couple of
 months. But the bond market seems to be showing, you know, flashing warning signs and telling one
 story and equities have been going a different way perhaps because of FOMO. Yeah, it really has
 been interesting and it seems that we're coming to a bit of a decision point there as well.
 You know, I think we need some relief in Hormuz. We need oil flowing through the
 straight once again to get the bond market to calm down a bit. Make bonds have actually been,
 you know, reasonably complacent given what's gone on in the in the golf. We'll see what happens.
 In coming months, but it seems like the pressure point is building to if we don't get traffic flowing
 in the next few weeks, bonds are likely to go through another round of price down yields up
 and more expectations for Fed potentially having to respond at some point. So how much does that
 also continue to trigger this rotation? Yeah, I think it does. I think it's one of those things where
 you start to pull back a little bit on duration everywhere including inequities and get a little
 bit more cautious there as to how you position yourself. So we've been a little bit more risk neutral
 the past few months. We're seeing some of these stocks starting to fall under their weight of
 expectations. Great fundamentals, but high valuation usually a time to step back a bit and say let's
 maybe drive at the speed limit instead of trying to exceed it for a little bit. Okay, maybe go take
 that summer vacation along a long weekend here and enjoy the warm weather. Yes. Great to have you
 on Robert Teeter. Thank you. Thank you. Turning to the latest in the Middle East,
 Israel carrying out fresh strikes in Lebanon after a Hezbollah rejected that ceasefire agreement
 between Israel and Lebanon. The strikes undermining the U.S. efforts to halt fighting there and move
 forward with a peace plan with Iran. Well, speaking on negotiations with Iran at the White House
 yesterday, President Trump making fresh claims that a breakthrough could be on the horizon. The
 President also suggesting that he could meet with Iran's new Supreme Leader if a deal is to be
 reached. Let's get to Dan Murphy and Abu Dhabi with more, especially Dan as we go into another
 weekend with more questions, more uncertainty, perhaps around the ceasefire.
 More questions than answers Morgan hates you and that much heralded Israel Lebanon ceasefire
 already on the brink. Hezbollah later named Kasim called the deal a luxury and also added,
 we did not make any commitment to any party to stop resisting. Hezbollah now demanding a full
 Israeli withdrawal first. And on the ground, this truce exists only on paper. We've been following
 reports that Israel has also kept up its strikes inside southern Lebanon overnight. And
 its own defense minister said in the last few hours, Israeli troops aren't leaving yet.
 So what all of this means for the broader U.S. Iran talks remains to be seen, but President
 Trump is staying optimistic. He says a deal could happen over the weekend and that talks with Iran
 are going well. Of course, the diplomatic headlines all driving the oil markets today as well,
 Morgan, which are on track for a game so far this week. Saudi Energy Minister Prince Abdulaziz also
 breaking months of silence in St. Petersburg saying the world needs every molecule it can get back
 over to you. All right, Dan Murphy. Thank you. Have a good weekend. We got a lot more to come here
 on morning call, including much more on the lemon stock slide as the retailers ongoing headwinds
 show no sign of easing. Plus, we got much more on SpaceX's historic IPO and one company looking to
 ride the growing enthusiasm around this emerging and growing business of space. And later,
 President Trump throwing hundreds of millions of dollars behind the American coal industry,
 sending some of the shares of those producers higher this morning. You can see right there on your
 screen, Peabody, which is a big coal exporter, a half a percent warrior, Ramaco, all names that have
 been moving over the last call at 18 hours here in markets. Very busy hours still ahead when
 morning call returns. Welcome back to morning call. Let's get a check on some of the big
 earnings movers this morning shares a Lulu lemon dropping as the company cut its profit guidance
 for the year expects second quarter results to come in well below estimates as its new products have
 failed to win back shoppers in the US market. Lulu's interim CEO says a while companies focus on
 boosting pull your price sale full price sales. She says slower than expected revenue trends will
 likely lead to markdowns to clear out seasonal inventory. Also, they blamed media coverage for the
 drop in the stock and what they saw in their earnings results for the first quarter. Okay,
 anyway, those shares are down 12 percent. Dogg aside and bumping up its revenue outlook for the year
 after reporting better than expected first quarter results. The eSignature company setting the
 strong adoption of its AI-powered platform, which accounts for about 13 percent of recurring revenue.
 Those shares are down 4 percent and take a look at rubric. Those shares are lower too despite
 reporting first quarter results and guidance that topped estimates. The cybersecurity and data
 management company citing new AI features, integration of products with Microsoft and Google,
 and the launch of a proprietary governance engine as supporting demand still down about 1.5 percent
 pre-market. Okay, we're officially one week, just one week, until the launch of SpaceX into the
 public markets with this highly anticipated and historic IPO. Drawing plenty of attention to
 the broader space sector, including to our next guests company. In cinnamon is the co-founder and
 CEO of APEX and joins us now and Ian, it is great to see you. You've had a busy week.
 So, first we get news that you're going to be working with Northrop Grumman on these
 space-based interceptors for Golden Dome and then of course, closing a funding round as well.
 I just want to start, just take a step back. What specifically does APEX do?
 Ian Morgan, it's great to be here. So APEX makes spacecraft platforms that are actually able
 to power really most of the things we're going on in space. So, as you mentioned,
 SpaceX's IPO is coming up in about a week. They build the rockets and the capabilities that really
 unlock space. They build the mechanism where a satellite can actually get delivered to space.
 At APEX, we are the space platform company that builds the spacecraft that let you unlock those
 capabilities, whether it be things like, as you mentioned, the Northrop Grumman space-based
 interceptor, things like up Earth observation payloads, thinking images of Earth or
 making different measurements for customers like NASA. For a variety of other missions,
 all of those are enabled by APEX's satellite platforms and we really had to come that go to
 an industry. Yeah, it's interesting. I made this point yesterday, but I'm going to raise it to
 you as well. When we talk about the so-called new space economy, we talk about all the capabilities,
 whether it's at APEX or others, this idea of in space, in orbit, infrastructure, and all the
 other stuff that's now going to come. What's fascinating to me is the fact that none of this would
 exist arguably if it wasn't for SpaceX, creating those rails to drop launch costs and even just
 to do things like sue the Air Force just to be able to have the opportunity to compete for contracts.
 It's completely true, right? Satellites in space have existed for decades, right? The last
 70 years, but for the majority of those 70 years, it's been incredibly difficult to actually get
 your satellite delivered to space, right? Riddled with problems really long lead times. It's really
 been since about 2018 and 2019 that SpaceX opened up the pathway. It's almost like they laid down
 the railway tracks and actually established service to expand into the West. And now companies
 like APEX are certainly needed to actually build these spacecrafts or the pace that are required
 to fill these rockets that SpaceX is building. So it's been a monumental shift in the market
 over the last six to seven years, which has really been the impetus for APEX and companies like
 us to go ahead and raise over half a billion in funding and to be trusted by almost every single
 major defense prime in the market. Yeah, and then of course in the public markets, you're seeing
 this shift right now too because all the publicly traded space docs are rewriting higher in anticipation
 of SpaceX, the valuation that it's commanding as it does look to go public next week. You just
 raise your own capital. And I think whether it's public markets or private markets, the world has
 awoken to this new space economy. So just in terms of being able to raise your own funding,
 what are you seeing in terms of feedback from investors right now?
 Investors, I think, are waking up to the realization that every single day life on earth
 truly does rely on space and space is hitting this accelerating condition where it's actually
 able to help further our economy in ways that previously people did not realize. The result of
 that has been hundreds of millions that don't billions of dollars of demand to invest in
 companies like APEX. We're just announcing our $200 million funding round. That is our third
 back to back $200 million funding round over the last 14 months. And every single one of those
 funding rounds, we could have raised four to five times that amount, but we've chosen to keep it
 down. So I think that really just shows the power of not just what APEX is doing,
 but the knowledge that the investors and the market are starting to have to the key
 opportunities that are really being published. That's super fascinating. Okay, so what does this money
 enable you to do now? I'm standing right now in APEX's factory one. We already have a facility that
 is capable of building more satellite platforms than the entire US government launch last year.
 And we are continuing to ramp up that production. Behind me, you actually see some of the containers
 where satellites are actively being shipped off on nearly a daily basis. We have a lot more
 launching in the coming months. And being able to continue to hire and ramp up is something
 that we're really excited to do with this additional capital. Yeah, I mean, we just talked about
 space-based interceptors for Golden Dome, some of the other things you work on. How do you see the
 communications, the space-based communications piece of the space market evolving here, too,
 since that is getting so much attention, whether it's SpaceX, whether it's Amazon, whether it's
 others. That's one of the key applications in space, but it's one of them. Do you have companies
 like, for example, SpaceX's Starlink, Amazon's Leo platform, really pushing the ball forward on
 what's possible with these proliferative constellations. And what we're starting to see now is for
 other types of applications, whether it be more tactical communications, space-based interceptors,
 missile tracking, adapt a lot of the learnings from those communication platforms. We're instead
 of launching just one very bespoke satellite, they're saying, let's go launch 50 or 100 or a thousand.
 And that idea of proliferation requires a lot more satellites to be built rapidly,
 which is exactly the market need that we're filling here at eight times.
 How are you thinking about space-based data centers? Is that an opportunity for space-based
 data centers? Space-based data centers. It's an inevitable opportunity for the future. It's
 something that we're already have multiple customers working with us on, and we have many more
 that we're actively talking to. It is one of those things where the timing on the market is going
 to be key, but it is absolutely happening. And we're very excited that companies like SpaceX,
 frankly, are unleashing the launch capability through origin as well that actually make those
 economics possible. And Cinnamon, great to see you. Great to see you. From Apex. Well straight ahead,
 we are wrapping up a major week, Prime Pios. They've been getting out there before this big one
 from SpaceX. So first, though, we're going to check on service Titan. Those shares are popping
 right now, 16% as we had to break. We're jumping after raising full your guidance.
 Well above the street's estimate, Q1 results also topping expectations. Morning, call
 it's going to mark it flash on shares of Continuum. I can speak today just a little more coffee.
 After making its trading debut yesterday, shares opened trading at $68, hitting a session
 high of $71.35 per share before ending the day, basically flat. As you can see, this morning pre-market
 down under a bit of pressure as well. This is the quantum company that was spun out of Honeywell.
 Well, another trading debut that we're watching, liftoff mobile, surging nearly 24% in its entry
 into the public markets yesterday under a bit of pressure this morning down about 4%. Also,
 keep an eye on applied aerospace, which went public earlier this week, and you can see those shares
 are down fractionally pre-market. But it's a flurry of IPOs, including SpaceX next week,
 Databricks, though, hitting pause on its plans to go public this year. And an interview
 with the company's CEO saying that he's doing so to avoid entering the markets in a year of
 massive offerings. So that, of course, has been one that's been highly anticipated as well,
 the potential for it in recent months. Checking some of the morning's latest headlines,
 though, President Trump announcing a $700 million plan to invest in the U.S. coal industry,
 the President invoking the Defense Production Act to distribute that money for a new coal export
 terminal to support more than a dozen existing plants. And a number of coal producers are getting
 a boost on the back of that news. You could see right there on your screen. Warrior Met
 co-op 2.5%, Peabody, a fractionally as well, and Remaco and others, too.
 In video, CEO Jensen Huang, meantime, has been invited to testify on Capitol Hill
 on the company's chip sales to China in a letter obtained by CNBC. Senator Elizabeth Warren
 is requesting that he appear before the Senate Banking Committee on Thursday, the potential
 appearance would come just weeks after he joined President Trump on his trip to China for his
 summit with President Xi Jinping. And the Wall Street Journal is reporting the largest banks in
 the U.S. plan to launch a tokenized deposit network next year. The journal says the move is aimed
 at helping banks like J.P. Morgan and Bank of America, City Wells Fargo hold off threats from
 stablecoins and crypto firms looking to push further into their businesses. We know they've
 been very vocal, especially in the midst of the Clarity Act back and forth. Well, the financial
 times reporting that anthropic is helping the NSA deploy its model, Mithos, for offensive cyber
 operations. The FT says that anthropic has installed about half a dozen staff within the agency.
 This despite its ongoing legal battle with the Pentagon. Well, we've got much more on the defense
 and the sector, the defense and aerospace sector increasingly tapping into tech.
 Coming up, we're going to talk to one high profile investor on where he sees opportunity
 as conflicts in Iran and Ukraine continue and as we had to break. Let's get a check on Merck and
 Zowetta shares because those are getting a bump this week on confirmation of that screw worm
 situation in Texas. The two companies both make treatments for the parasite. Agriculture Secretary
 Brooke Rollins says that no other infestations of cattle or other animals have been detected following
 that confirmed case. Keep in mind, and I spoke to her a week ago, from the Reagan National Economic
 Forum, we were not taking imports of beef from places like Mexico because of concerns around this,
 so certainly getting a lot of attention right now. But so are those treatments. We'll be back after this.
 I'm Morgan Brennan. Welcome back to morning call. US stock futures with a Dow coming off a fresh hot
 record high as you can see right there this morning. Mixed picture with a Dow poise for a higher
 open again this morning. The S&P down ends the Nasak poise for another day of losses this as the
 Nasak is on pace for weekly losses. The S&P poise to eat out a gain here and the Dow on pace for gains
 too. We'll take a look at treasuries ahead of the monthly jobs report. So you could see yields
 under a bit of pressure across the curve this morning. The US tiny or treasurer yielding 4.467 percent
 and the fed sensitive to your treasury 4.037 percent again ahead of that key economic reading this morning.
 Well, we're checking energy as we monitor developments regarding Iran as well and you can see
 crude oil under a bit of pressure this morning down about half a percent for WTI crude trading
 rounds. 92 dollars 53 cents a barrel and Brent is also trading below 95 dollars a barrel right now.
 We're watching continued pressure for crypto too and as you can see right there on your screen
 Bitcoin specifically trading below 63,000 having a very rough week down another 1% this morning
 and basically at lows for the year. Checking global markets too and negative finish to the
 trading day in Asia South Korea's cost be shedding 5% as tech stocks followed the pullback in the US
 with those AI names and specifically semi-conductors really taking a down draft here but of course
 that's after a tour around it's a mixed session mostly positive session albeit fractionally
 in Europe to finish out the week. We're turning to the latest from the Middle East as well
 Israel carrying out fresh strikes in Lebanon after Hezbollah rejected the ceasefire deal
 reached earlier this week between the two countries the latest strikes undermining US
 efforts to halt the fighting there which could help to move forward a potential peace plan with Iran
 speaking yesterday about the ongoing negotiations with Iran president Trump making fresh claims
 that a breakthrough could be on the horizon. The president also suggesting that he could meet with
 Iran's new supreme leader if a deal is to be reached. Well as for the other major global conflict
 the war on Ukraine speaking to foreign media editors yesterday Russian president Vladimir Putin
 is sticking to his hard line stance on the battlefield but says president Trump's proposals for
 peace could end the fighting if Kiev is ready to compromise Putin's comments coming as Ukrainian
 president Vladimir Zelensky published an open letter proposing that the two leaders meet to
 agree on an end to the war. Well joining me now Russia managing partner at Shields Capital
 is the VC firm that specializes in early stage investments in the defense tech sector. Shields
 current portfolio includes U Force. This is a Ukrainian founded maker of unmanned military systems
 and drones and Raj it is so great to have you on the show welcome wonderful to speak with you
 lots to talk about but first let's start with this as as we do see talks continuing here perhaps
 percolating with these major conflicts conflicts around the world some of the learnings that we've
 gotten from Ukraine and what that means for a company like U Force. One more Intel is great to
 be on with you as well. So U Force is a Ukrainian company that builds the Magura C drone which is an
 autonomous drone that had major impact on the Russian Navy and the nemesis aerial drone and so you
 know what's really interesting about his Ukraine is that history rarely gives us a preview of what
 future wars look like but we see that today and so the question now is is the US and its allies
 going to learn fast enough right we're watching the convergence of AI autonomy mass production
 fundamentally change the balance of military power and and so you know for years we talk about
 what technology might do Ukraine is showing us what works today and increasingly what I'm seeing is
 that customers even including the Americans want proof not promises in the era of power point
 defense is ending. Yeah it's a really interesting time because to your point we're seeing the mix
 change and then how we're acquiring that mix around weapon systems and the influence of new
 technologies many of them now commercially driven as well or proven in real time from innovations on
 battlefields for example in Ukraine and it's changing how we think about military and how we think
 about war fighting so what does that mean from I guess not only a battlefield perspective but also
 from an investing one. It's a very exciting time to be investing in this space right it's again
 rare that you see so much change in how militaries are going to equip themselves train and fight
 and the real difference now is that of speed and that's what we've learned in Ukraine it's what we've
 seen in the Iranian conflict as well which is the changes in the battlefield the advantage goes
 to the group that can understand those changes adapt them and then more importantly put them out
 at scale and so we're proud to invest in amazing entrepreneurs that are leading the charge here
 you force being one of many. Yeah we've seen some companies go public here we're just talking
 about it including a name that I think was in your portfolio Hawkeye 360 which is a defense and
 space tech company as well anticipation about what the SpaceX IPO is going to do to reset or maybe
 lift the sector overall. I think we're seeing finally the larger public markets understand and see
 the value in these these companies Hawkeye 360 which we're proud to be an investor in for years
 the first one I saw that you had Ian Cinnamon on earlier also one of our portfolio companies
 and great leaders and so I think what we're going to see with SpaceX is just going to accelerate
 this trend and bring additional needed capital to this really important sector of defense
 innovation and more broadly just industrialization right as we bring back manufacturing
 here to the United States. Yeah I mean as you as you do see these liquidity events happening
 though what does it mean for the startup ecosystem? Well I think it's going to show investors of
 all flavors that you can make great returns you're going to have a whole ecosystem of angel investors
 new entrepreneurs so I think it's a really exciting time and an inflection point for the defense
 sector. Yeah you also invest in cyber which is certainly in focus right now especially as we see
 AI revolution really take root headlines just in the last 24 hours about Anthropic for example
 whether it's mythos whether it's even this idea of a quote recursive self-improvement
 that they're tracking and the fact that that could create significant risks for society as Anthropic
 puts it meaning that that full self-recursive self a full recursive self-improvement might
 increase the risks of humans losing control over AI systems. I've been following this notion of AI
 bot swarms how to think about what all of this means from a cyber risk how that changes and how
 you now counter that in terms of innovations in the startup landscape. Yeah I mean we're so
 dependent Morgan on our cyber infrastructure our banking our communications and so mythos is
 just the tip of the iceberg of how automated attacks are changing the cost equation for bad
 guys versus versus good guys and so I think the answer here though is not going to be solely
 of technology right the technology is changing so fast and so it's going to take a combined platform
 that's going to take technology process and you know more traditional things so one of our investments
 that we're that's tackling this problem head on is called resilience and it's combining cyber
 insurance with technology and the concept of herd immunity right you see it across a portfolio
 how can you learn quickly how can you build automated protections so you can stay one step ahead
 of the bad guys and also have the financial element right because these bad guys are out to
 to steal from us and so it's a really exciting business that's growing quickly. All right Rasha
 it's great to have you on. Thanks Morgan I was pleasure. We got a little more to come here
 on Morning Call including the NBA finals sparking a betting boom as prediction markets look to get
 a bigger piece of the sports books bottom line Morning Call is back after this.
 Welcome back to the Nixon Spurs we'll face off in game two of the NBA finals later tonight
 after New York's dramatic come back to beat San Antonio in game one and while the main focus
 may be on the contest on the court there's also a battle brewing for the big money being bet
 on these games so Contessa Brewer is covering the brewing enjoy this now and more on that hi Contessa
 I like what you did there Morgan what we're seeing is this real competition to turn the fan
 enthusiasm into cold hard cash for sports books and for prediction markets I mean look the
 nicks have not been to the NBA finals in more than a quarter century there are pop-up watch party
 sprouting all over the city to bad that they're not going on at this time in the morning but fans
 just are feeling lucky and it turns out they are betting on the game. Fandall says active customers
 and bet count were both up around 20% year over year for game one at the peak and they were taking
 in almost 18,000 bets per minute. Draftking says it too was seeing strong customer engagement
 and especially strong in-play betting in the fourth quarter of that last game when things got
 really exciting but look it's not all good news for the sports books quote customers got us
 everyone seems to be on the next and Brunson scored 30 points so Draftking's told me look
 they took it on the chin they're having to shell out big money on customers winning
 one interesting dynamic here New York has legal sports betting but Texas does not and so Draftking
 said it was the biggest day ever on its predictions platform which of course is active in Texas
 for customers it surpassed the Super Bowl Draftking said Fandall's growth in predictions is
 really fueled here by states that have not permitted sports betting so they don't offer sports
 predictions in states where they have a gambling license and that's what I was talking about
 with Fandall CEO yesterday or flutter CEO yesterday and Calche of course offers sports predictions
 nationwide it says it's some more than a quarter billion dollars in trading volume on game one
 Calche has become a real juggernaut Morgan in the first quarter of this year it had
 5 million monthly active users according to sensor tower compared to roughly 6.5 million users
 for Fandall and Draftking's Calche's growth 680% year on year of course we have a commercial
 relationship with Calche CNBC does which includes customer acquisition and a minor investment as well
 Spurs and nicks go head to head again tonight in San Antonio probability right now on Calche
 66% that the Spurs are going to win game two. Raise your money on New York New York all the way baby
 Contessa brewer thank you and by the way you're right we need some parties it's five o'clock somewhere
 thank you straight ahead the morning call crew tune up the trading day ahead
 including the next big test for the markets and white one crew member says do do believe the hype
 on SpaceX ahead of that historic IPO we're back in a minute
 well time for your morning call sheet where we look at the topics driving the trading day ahead
 crew members today Matt powers of the powers advisory group Adam Kobasey from the Kobasey letter
 and new to the show and the crew welcome and Jose Torres of interactive brokers great to have
 great to have you back okay we got a lot to get through Adam I'm going to kick this off with you
 because we just cheesed it before the break we're two minus one week from SpaceX IPO launch
 you say believe the hype why I mean you know this is going to be if we were just talking about
 off air one of the craziest I probably the craziest IPO ever I think there's expectations are high
 but I think people know that with you know any Elon Musk company the the sky really is the lemon I
 mean and basically every pullback on any Elon Musk company has been a buy in the long run I think
 that continues to be the case I think SpaceX's story here everyone is talking about how you know
 the first quarter revenue was three billion and it was but that's not the story the story is that
 you saw the Goldman Sachs report yesterday they think revenue could 100 x by 2030 could be more
 than that I mean just Starlink alone is probably going to be doing over a hundred billion in revenue
 by then per year and I think you know the AI angle too is going to be a very big business for them
 so I think the IPO itself in the beginning is going to be very volatile I mean that's how all these
 things are you could even see a drawdown after a little bit but I think in the long run it's going to
 be it's going to be very strong and I and these days I mean it's indicated to open you know
 it around maybe two two trillion market cap these days that's not even necessarily that big of a
 company I mean we're in videos now on the five trillions right so obviously in videos a far
 more mature company but the two trillion tag it's big but it's not huge in the landscape compared
 to what we're seeing now it's kind of crazy to say I mean microns at 1.1 trillion yeah so everything's
 in the trillions now it seems yeah and I do want to get into that more in just a moment the first
 Matt I want to get your thoughts on this especially because there is this debate about what it's
 going to do to liquidity in the market what it's going to mean for other hyper scalers in the market
 even Bitcoin as we see the drawdown there and sort of this idea of folks positioning themselves
 for this IPO and the ones that are coming behind it yeah yeah good morning isolated clearly
 historical I I just think the question for me is you know source of funds so you look at SpaceX
 you know open AI taking Anthropic even I mean their IPO's this year you know we're talking about
 the three largest capital raises arguably the markets ever seen so the question isn't demand it's
 where's this money coming from you know I know we're at eight trillion in money market funds but I
 don't think investors are going to shift to risk off assets and IPOs you know so institutions
 they don't have unlimited capital they've got to sell something else to do this so I think the
 most obvious source of liquidity could be the same AI infrastructure you know and semiconductor
 names that have already had these massive runs you know so ironically I think these IPOs could
 validate the AI theme and maybe simultaneously create some pressure on parts of the AI trade so
 so I think the thought I the bottom line on that I think the thought is that maybe the biggest risk
 to AI here going forward are you know the stocks in general maybe the next generation of AI
 stocks that we're going to see coming on the pipe yeah I do wonder Jose we talk about bifurcation
 the market we talk about bifurcation in the economy I mean obviously this is a huge focus to
 around retail investors it's a key thing other than the capital piece which is the big piece
 the way they're structuring this IPO its basics is really with a focus on retail investors
 for others transit families whether it's employees whether it's others being able to get in
 and participate in a more meaningful way and I do wonder what that means in terms of
 the every man if you will being able to participate more in some of these wealth creation events
 or if there's greater risk because of that here well I don't think that there's greater risk I think
 over time you know participation in American stocks overall has been higher and it's been a great
 wealth driver for the US retail investor as a lot of them have even graduated to become more
 sophisticated investors I think today retail investors are going to be happy by the end of the day
 I think we're going to get a modest beat on jobs that's not going to lift interest rates too much
 and it's going to allow for a continuation in the broadening that we saw yesterday Morgan with
 the Dow at a record high even though the AI trade has been waning yeah speaking of that I mean you've
 been tracking it Adam just this parabolic surgery scene seen in semi stocks and how it's
 gobbled up the market more broadly the fact that we're taking a pause here that at least yesterday
 we did see this rotation out of some of these high flyers does that have legs you know I think it's
 normal right we've been on an insane run the S&P is up 21% and since March 30 since the low on
 March 30 but I think when you zoom out a lot of these large names that were leading the market
 looking in video and video has been kind of diverging from the rest of the chip stocks I think
 those names can kind of step back in now and video is also trading at 2324 times forward earnings
 the S&P 500's at 22 times so the and video is almost is as in line with the average S&P 500 stock
 from a forward earnings basis that's pretty cheap in my view so I I think you know you will see
 some volatility probably even around when these when SpaceX and these other IPOs come out
 you might see some drawdowns you could see the S&P fall 5 or 10% but I think in the long run I think
 this year even we'll see the S&P above 8000 because this AI trade is just so strong and there is
 the earnings growth and momentum behind that to support it so I I don't think this is the time
 to fight the AI trade yeah um as I you just mentioned at jobs report this morning I mean we do have
 we have sticky inflation and we'll get more readings on that next week we do also do seem to
 have a labor market that is stable uh perhaps maybe even more we'll see what we get this morning
 yeah I think we're seeing an acceleration Morgan Joltz 23 month high 80 p 16 month high
 the jobs market has been really terrific the benefits from last year's passage of the big beautiful
 bill have been monumental and really better than expected this economic re-exceleration we're seeing
 here mid-year has been terrific and it's translated to earnings expectations uh the bulls have a lot
 of levers to pull here in the market if the AI trade doesn't work for a little bit like it didn't
 work between January and March we can still see like Adam said that move towards S&P 508000 if the
 more cyclical areas start to participate more we have more of a broadening I think we can get there
 okay we got 30 seconds left not even Matt final word yeah I mean quickly yesterday was a prime
 example this split market you know I think uh the markets rotating to those uh areas the healthcare
 financials discretionaries and and we'll continue you know I think that's where the margin of safety
 lives so we just we're we're looking to counterbalance a lot of this AI exposure with with those areas
 of the market all right look at that um gentlemen thank you so much it's great to have you all here
 happy Friday happy weekend thank you to our morning call crew we just take a quick check on
 US stock futures here uh mixed picture still the Dallas poised for gains after a record close
 yesterday squawk box starts right now